Salesforce: Record Holiday Sales, Rising Returns Impact Profits

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Salesforce (NYSE: CRM), the world’s #1 AI CRM, has unveiled new data showing that holiday retail sales surged to an unprecedented $1.2 trillion globally and $282 billion in the U.S. However, the report also highlights that high return rates may dampen overall profit margins.

The strong holiday shopping season was driven by spikes in mobile and social commerce, as well as a surge in consumer spending after months of saving earlier in 2024. Despite the record-breaking sales, consumers have already returned $122 billion worth of merchandise, with the rate of returns increasing by 28% compared to the previous year. Both shoppers and retailers leaned into the power of AI and agents to enhance holiday shopping experiences, influencing $229 billion (19%) of all online orders.

“While retailers had a robust holiday season, the 28% rise in return rates compared to last year is a concern,” said Caila Schwartz, Director of Consumer Insights at Salesforce. “AI and agents have provided retailers with notable benefits, and their role will be even more critical in the coming year as retailers aim to minimize revenue losses from returns and reengage with shoppers.”

Key Insights from Salesforce’s 2024 Holiday Shopping Report (Nov. 1 – Dec. 31, 2024):

  • Record-Breaking Online Sales:
    • Global online sales hit $1.2 trillion, while U.S. sales reached $282 billion.
    • This marks a 3% global year-over-year (YoY) increase and a 4% YoY increase in the U.S.
    • In the European Union (EU), online sales grew by 1% YoY.
  • AI and Agents Shape Shopping Experience:
    • $229 billion in global online sales were influenced by AI-powered product recommendations, targeted offers, and conversational customer service.
    • AI and agents impacted 19% of holiday purchases, a 6% increase from 2023.
    • Retailers saw a 25% increase in the use of generative AI features, including agents, during the holiday season compared to earlier months in 2024.
    • Chat-powered customer service saw a 42% increase in usage over the 2023 holiday season.
  • Surge in Return Rates:
    • Over $122 billion in global purchases have already been returned, up 28% from the previous year.
    • Salesforce projects returns will grow to $133 billion, creating an opportunity for brands to use AI-powered agents to simplify and personalize the returns process.
    • A new Salesforce survey found that 75% of U.S. shoppers are interested in using AI agents to complete returns and exchanges.
  • Social Commerce’s Growing Influence:
    • Social commerce platforms like TikTok Shop and Instagram generated 20% of global holiday sales.
    • Social media-driven traffic grew by 8% YoY, driving 14% of all e-commerce site traffic.
  • Mobile Sales Continue to Dominate:
    • Mobile devices accounted for nearly 70% of global orders, a rise from 67% in 2023.
    • Christmas Day saw the highest mobile order share, reaching 79%.
    • $842 billion in global sales and $195 billion in U.S. sales were initiated by mobile devices.
  • Modest Discounts and Loyalty Programs:
    • U.S. retailers offered average discounts of 23%, up 1% from 2023, while global discounts reached 22%, up 2% YoY.
    • Popular categories for discounts included makeup, general apparel, and skincare.
    • Salesforce found that nearly 72% of U.S. shoppers say loyalty programs encourage continued business with brands.

Salesforce Powers Holiday Success

Brands and retailers globally found success with Salesforce throughout the holiday season:

  • Commerce Cloud powered over 220 million online orders, delivering personalized digital experiences.
  • Marketing Cloud facilitated 378 billion marketing messages, marking a 5% YoY increase.
  • Service Cloud helped manage nearly 33.3 billion customer interactions.
  • Data Cloud processed over 8.5 trillion records, helping retailers personalize over 840 billion profiles across multiple platforms.
  • Einstein delivered more than 368 billion AI-powered product recommendations, a 30% increase from last year.

As retailers look to the future, Salesforce’s insights and technology will be key to enhancing customer experiences and minimizing the impact of rising return rates.